(FORTUNE Small Business) – WHEN WE LAST WROTE ABOUT INSITU, THE Bingen, Wash., firm had just signed a deal with Boeing to help it market the Scan Eagle, an unmanned aircraft ("Growth Engine," November 2002). Now the planes fly daily in Iraq, conducting surveillance and improving soldier safety. In 2004 the Marines hired Insitu (insitugroup.com) and Boeing to provide Scan Eagles and technicians to operate them. They are used to spot insurgents and track Marines during combat. A similar U.S. Navy contract and sales to an airborne-survey firm also helped raise company revenue from $700,000 in 2001 to $29 million in 2005.

CEO Steve Sliwa says Iraq operations have "exceeded everybody's wildest expectation." The Marines initially asked Insitu and Boeing technicians for 300 hours of flights a month. They now fly almost that many hours every week. "The Marines told us they would have had 30% greater casualties when they went into Fallujah if they hadn't had our system," Sliwa says. "For a bunch of engineers in the Columbia River Gorge, it doesn't get much better than that."